New Delhi, May 22
Opposing the government’s decision to deduct tax at source (TDS) on pre-mature PF withdrawals, trade unions today said they would ask the Labour Ministry to put the Employees’ Provident Fund Organisation’s (EPFO) order on hold.
In a notification issued yesterday, the EPFO said it would deduct TDS from June 1 on PF withdrawals where accumulations are over Rs 30,000 and the employee has worked for less than five years.
“We will oppose the government’s move of deducting TDS at PF withdrawals. We have decided to write to the Labour Minister for keeping this notification in abeyance,” said D L Sachdev, secretary, All India Trade Union Congress.
Another EPFO trustee and Hind Mazdoor Sabha Secretary AD Nagpal said, “We had opposed this move earlier also. Even the EPFO had proposed to exempt cases where accumulations were less than Rs 2,00,000. PF withdrawals should not be taxed.”
In the current scenario, the PF withdrawals are treated as taxable income if the cumulative service period of a subscriber with present as well as former employers is less than 5 years.
“Earlier, many regional heads were not deducting the tax on such PF withdrawals where service period was less than five years. Thus, the EPFO got notice of tax demand to many field offices in these cases. The limit of Rs 30,000 is provided under the notification to provide some relief to marginalised people,” a senior official said.
"Earlier, there was no exempted slab for PF withdrawals for subscribers with less than five years of service. But now, it's provided in the notification," the official added. — PTI